Ministry of Power Reinstates Group Captive Open Access Model Ownership Requirements

The Ministry of Power recently made important revisions to the Electricity Rules, 2005, with significant implications for the group captive open access model. In a notable change, the Ministry has reinstated the previous regulation, allowing collective captive users to jointly hold a minimum ownership of 26% in a group captive open access project.

This amendment alters the language used in the rules, specifically in sub-rule(1), clause (a), and sub-clause(i), replacing “captive user” with “captive users.” This move is in stark contrast to a July amendment, which mandated that every captive power user, even within a group captive open access structure, must hold a minimum ownership of 26%. This change had raised concerns among stakeholders who believed it could deter the participation of multiple consumers in the group captive open access model.

Responding to these concerns, the Ministry introduced the Electricity (Third Amendment) Rules, 2023. This revision comes after extensive discussions with stakeholders who had voiced their apprehensions. The Ministry has also taken steps to ensure uniformity in the process across all states by appointing the Central Electricity Authority (CEA) to verify the captive status of projects supplying power to consumers located in different states.

Furthermore, the Ministry has broadened the definition of captive consumption, allowing power consumption by the subsidiary or holding company of the captive user to be considered as captive consumption by the captive user. This change is expected to have a positive impact on the group captive model of open access, which is highly favored by the commercial and industrial segments. It not only enables them to utilize green energy but also offers substantial savings on energy bills.

In line with these developments, the General Review Report 2023 by the CEA indicates that renewable energy sources, such as wind and solar, accounted for 9.07% of the total installed captive capacity as of March 31, 2022. This suggests a growing commitment to cleaner and more sustainable energy sources within the captive power sector.

Conclusion

These revisions to the Electricity Rules, 2005, signify a significant step towards promoting flexibility and inclusivity within the group captive open access model, aligning it more closely with the needs and preferences of diverse stakeholders in the energy sector.